Australian Dollar Slumps as Westpac Revises RBA Expectations
The Australian Dollar suffered a fresh sell-off on Wednesday as it was undermined by speculation that the Reserve Bank of Australia (RBA) could accelerate the timetable for its next rate cut. Analysts at Westpac now forecast that the next cut could come in October rather than November as previously predicted as they suggest domestic employment will continue to undershoot the RBA’s targets.
Coming up in today’s session will be a speech by RBA Governor Philip Lowe, which could place further pressure on the ‘Aussie’ if his comments add more weight to this speculation.
Pound Sterling (GBP) Climbs as Boris Johnson Appointed PM
The Pound (GBP) appeared to be the strongest performer in currency markets yesterday, with Sterling accelerating as Boris Johnson was formally appointed as the new UK Prime Minister. In his first speech as PM Johnson said he was confident that he will be able to reach a deal with the EU but that a no-deal Brexit remains a ‘remote possibility’.
Outside of the political headlines that will likely continue to dominate Sterling sentiment today we could see the Confederation of British Industry’s (CBI) latest distributive trends index also influence GBP exchange rates today, especially if it shows retail activity remained weak this month.
Euro Slumps as Gloomy PMIs Stoke German Recession Fears
The Euro (EUR) plummeted during the European session yesterday as markets reacted to some abysmal Eurozone PMI Figures. Of particular concern for EUR investors were the German manufacturing figures as they revealed the country’s factory sector suffered its sharpest contraction in seven years, stoking fears the Eurozone’s largest economy may be headed towards a recession.
Centre stage in today’s session will be the European Central Bank’s (ECB) latest policy decision, with markets bracing for some notable movement in the Euro today in response to what is widely forecast to be an extremely dovish tone from policymakers.
US Dollar Slips from Best Levels
The US Dollar (USD) stumbled overnight on Wednesday, with the US currency retreating from its recent highs due to some broad selling. This was likely spurred by US-China trade optimism yesterday which saw investors willing to drop the safe-haven US Dollar.
Potentially revitalising USD exchange rates later tonight however will be the publication of the latest US durable goods figures, with economists forecasting that goods orders will have rebounded in June.
Canadian Dollar Flounders as Oil Prices Remain Flat
The Canadian Dollar (CAD) was left rangebound yesterday with the oil-sensitive ‘Loonie’ struggling to find support as crude prices stalled at $63 a barrel, despite escalating tensions in the Middle East.
New Zealand Dollar Firms as Trade Figures Impress
The New Zealand Dollar (NZD) accelerated on Wednesday, with the antipodean currency being buoyed by both a rise in market risk appetite as well as the publication of some stronger-than-expected domestic trade figures which revealed New Zealand’s trade surplus swelled to NZ$365m in June.
Data Releases
July 25th 13:05 AUD RBA Lowe Speech
July 25th 18:00 EUR German Business Climate (Jul) 97.1
July 25th 20:00 GBP CBI Distributive Trades (Jul) -10
July 25th 21:45 EUR ECB Interest Rate Decision 0%
July 25th 22:30 USD Durable Goods Orders (Jun) 0.8%